EU agrees $260bn stimulus plan

Deal sees each member investing 1.5 per cent of gross domestic product into their economy.

12 Dec 2008 16:36 GMT

The $260bn plan is designed to dig Europe out of recession [AFP]

Ahead of the summit, Germany had expressed reservations about ploughing so much public money into the economy and resisted pressure to contribute more than what it judged necessary to revive the German economy again.

Officials revised earlier versions of the conclusions to say the package should be worth "about" 1.5 per cent of GDP rather than "at least" 1.5 per cent as seen in an earlier draft.

Russia in recession

As the economic crisis continued to spread across Europe, Russian news agencies quoted a senior economic official as saying that the country was in recession and faced at least two quarters of economic decline.

"The recession in Russia has already begun and I am afraid this will not end in two quarters," Andrei Klepach, deputy economic development minister, was quoted as saying by the Interfax news agency.

Klepach said the economy would expand by less than the projected 6.8 per cent this year.

MICEX, the country's main share index, stopped trading in the early afternoon after its technical index fell by more than 5 per cent.

Russia's industrial sector has been heavily hit by falling demand for metals, construction materials and other products, as well as the fall in oil prices which have plummeted since a summer high of $147 a barrel.